On Honesty in Sovereign Information Sharing
Rakesh Agrawal, IBM Almaden Research Center
We study the following problem in a sovereign information-sharing
setting: How to ensure that the individual participants, driven solely
by self-interest, will behave honestly, even though they can benefit
from cheating. This benefit comes from learning more than necessary
private information of others or from preventing others from learning
the necessary information. We take a game-theoretic approach and
design a game that models this kind of interactions. We show that if
nobody is punished for cheating, rational participants will not behave
honestly. Observing this, our game includes an auditing device that
periodically checks the actions of the participants and penalizes
inappropriate behavior. In this game we give conditions under which
there exists a unique equilibrium (stable rational behavior) in which
every participant provides truthful information. The auditing device
preserves the privacy of the data of the individual
participants. Finally, we quantify the relationship between the
frequency of auditing and the amount of punishment in terms of gains
and losses from cheating.